Buying property through Bank finance will actually reduce total buying cost of property.

Dear Readers,
Greetings,

Although, have written article earlier on my blog in detail about advantages of bank finance however got intimated to share one of the greatest advantage of bank finance which believe that will help many buyers who are looking desperately to buy property but let it go because of higher total cost of property as per their budget. my intention here is to give them one more perspective to look/think at it.

being a brokering company, I am involved daily with real time real estate transactions and apart from many advantages of bank finance route in buying properties, come across one real fact and greatest advantage of bank finance that it will actually reduce total cost of property.

Sure, you will ask me how, so here is one example to explain it better, lets assume that property cost is either Rs. 50 Lacs or 1 Crore and maximum bank finance available will be Rs. 40 Lacs and 80 Lacs respectively so approximately EMI will be around 40,000/- and 80,000/- respectively however after the possession of the property, you may rent it or going to occupy yourself and In both the cases, you will be either earning rent of Rs. 10,000/- per month and Rs. 25,000/- respectively or saving same amount of Rs. 10,000/- and Rs. 25,000/- for moving from your currently rented place to your own property. this way ultimately, you will be always paying this Rs. 10,000/- and Rs. 25,000/- less for EMI and net you will be Paying EMI 30,000/- and 55,000/- per month only and as to understand simply, each 1 lac will attract Emi of Rs.1,000/- per month so you can calculate saving of Rs. 10,000/- per month to Rs. 10 Lacs which you have never paid from your pocket therefore actually, you bought this property for not 50 Lacs and 1 Crore but in Rs. 40 Lacs and Rs. 75 Lacs only, Is't great advantage of bank finance?

now let's see the scenario that you are selling this property for any reason at the later stage, again the bank finance has great advantage that new buyer will come and will either have ready payment or will go to bank finance so in both the scenario, will clear your outstanding bank loan amount and you are paying from your pocket only the your contribution and EMI till that date so the profit generated on the investment is quite higher and handsome on the actual investment done by you from your pocket and will be not even the 50% of total cost of the property. is't again great advantage of bank finance?

This is really an amazing and encouraging aspect of bank finance which I feel allow many reluctant buyers (end users and investors) to think differently and ultimately help in buying properties for sure.

However, wish to again note that this scenario of bank finance advantage is only possible and applicable in developing country like india where there are million of houses are required in every prime city of india and there is real demand and shortage of million houses required right now and in future.

Still, it's very important to understand that nowadays, real estate market is not that buy any property anywhere and expect good returns for it and may end up no return dead investment therefore it requires proper research and after surveying on the ground, one should decide for it as an opportunities always change with the time. for that, an expert needs to be consulted & hired which will not only benefit in finding right opportunity for buying property but also to manage it professionally at the later stage as it will involve many aspect of managing, leasing / renting and selling the property at the later stage to make earning & profit out of it.